This mindset is common, but it's mistaken. Dividend income is not "free" (the share price drops when the dividend is paid out) and money is fungible, it doesn't matter if you get $100 in dividends or $100 in capital gains, you still got $100 dollars added to your AGI. What matters is total return = capital appreciation + dividends (you can't look at one or the other in isolation). Having said that if you're going to be in the 22% tax bracket, wouldn't you rather only pay 15% on long-term capital gains? Most would say yes, and that's exactly why we recommend that Taxable accounts be 100% stocks, while all the bonds you need to meet your desired asset allocation are held in Traditional Tax-Deferred accounts, which is in adherence with Tax-Efficient Fund Placement.I hate selling shares and need to know the best way to preserve the most principle.
Your fundamental question is about assessing a Safe Withdrawal Rate that will last your lifetime and probably leave a legacy to your kids and then determine if that income level (+SocSec and any other non-portfolio income) is enough to meet your retirement expenses (including income taxes and post-retirement savings) if you were to move back to the US. Certainly one variable that you should explore is whether it's best to claim your own SocSec at 62 and delay survivor benefits to 67 or if it's best to just claim survivor benefits at 60.I understand that there is no simple answer, I just want some advice for where to begin researching that might work best for my new situation. I truly appreciate any and all advice. I have been reading and researching but I see so much contradictory information, I guess I am hoping for more clarity on where I should be focusing my research.
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Income:
@123 suggested applying the 4% rule, but that rule is predicated on a 30y withdrawal period. If you're only 60 and have a life expectancy to 95 (good health and your bloodline predecessors lived past 90), then that's a 35y period and the 4% rule has to be adjusted for the longer duration.
Trinity Study
Table for 4% Rule Adjusted by Withdrawal Period (derivation link)
So a $2,450K portfolio using a 3.7% initial draw in year-1 of a 35-year withdrawal period is $90,650. That draw could be offset (or added to) by whatever you collect for SocSec, which could be one of two cases (that you'd need to research what case 2) benefits will be):
1) Take survivor benefits at 60: $26K/yr (if this is higher than your own benefit would be, then this is all you'll get from SSA)
2) Claim your benefit at 62 and delay survivor benefit to 67: You need to research your projected benefit amount @ 62 and the survivor benefit amount projected to 67.
You might be able to estimate the two benefits for case 2) with your online account at https://ssa.gov or give them a call (much less likely to get through to someone helpful) or use a 3rd party calculator to estimate these things, but you can decide between case 1) and case 2) without quantifying case 2).
As it stands, your income "gut-check" for case 1) looks like this: $90.7K Portfolio + $26K Survivor = $116.7K in year-1 (adjusted for inflation each year after initial draw). That might be higher for case 2) in the long-run if you claim your own benefit @62 and delay survivor @67, but we can't quantify that until you get those benefit estimates.
Expenses:
Once you have a handle on income you need to see if that meets your estimated expenses. We'll use @KlangFool's formula to estimate your current expenses: Annual Expenses = Gross Income - Taxes (1040, Line 24) - Annual Savings. Then adjust that by what will change in retirement (retirement savings goes away, but savings for home repair/upgrade, new cars, gifts to children remain; principle & interest eventually go away when mortgage is paid off, but property tax & hazard insurance remain; commuting costs might go down but vacation spending might go up; term life insurance payments might go away but costs for long-term care in late retirement might go up).
The beauty of Klang's formula is that if you take out taxes and known savings you are spending all the rest of it. We've seen posters that had a detailed budget in a spreadsheet or phone app and were surprised to see Klang's formula show them as much as $50K of unaccounted spending!
Gross Income = $116.7K
Taxes = $17.1K (estimated from Engaging Data: Tax Visualization)
Savings = $6K (about 5% of gross for "lumpy" expenses)
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Expenses = $116.7K - $17.1K - $6K = $93.6K
So if you're estimated expenses are < $93-94K, you're probably good. I ran a simple Withdrawal Monte Carlo using the constant-dollar (Const-$) strategy of the Trinity Study and it looks like there's a 90% chance you'd leave at least $1.5M to the kids at age 95 (which is obviously worth less than $1.5M in today's dollars). There's a 50% likelihood of leaving around $14M or more to heirs (and 50% chance of less). My models, and others that don't require Excel, are linked below the image. Also note that I assumed a 60/40 asset allocation but you need to figure out what your desired AA is, which should be matched to your risk-tolerance and remaining time-frame. Try the the Vanguard Investor Questionnaire for a rough cut, then tailor the quiz result to be more or less stocks based on your comfort-level.
The Const-$ strategy of the Trinity Study is a useful "gut-check" for planning, but the actual withdrawal strategy many of us are likely using is Variable Percentage Withdrawal (VPW) or an Amortization Based Withdrawal (ABW), the latter of which is used by the TPAW Planner (which I encourage you to play with). VPW and ABW require some flexibility in spending (may face a cut in a market down-turn) in exchange for generally being able to spend more of your assets in your lifetime (helpful if $93.5K isn't quite enough and legacy to kids is lower priority than you have having a decent lifestyle in the US or Honduras).
Data and Models I use for Monte Carlo:
NYU Data Set 1928-2017 with Model Fits
Accumulation Monte Carlo
Withdrawal Monte Carlo <- image above
You'll need a MS Excel license; download to your local machine and enable macros (required for the 1,000 random trials and results aggregation).
I'm using my own model as I like to know what's under the hood, but there are other models I like that have public facing website interfaces:
TPAW Planner (probably most comprehensive, supports ABW), <- Try this one!
Portfolio Visualizer's Monte Carlo (also their Financial Goals model is nice),
Engaging Data: Rich, Broke, or Dead, (uses historical returns in a cycle for your retirement duration), and
FireCalc (also historical data, but lots more inputs to tailor to your situation).
Paid models sometimes cited here include Boldin (formerly NewRetirement) and Pralana Gold as well as many others (just citing these not recommending for or against on any of these).
"All models are wrong, some are useful." – George E. P. Box
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That's probably enough to try and comprehend for one post, but it's likely you'd have follow up questions. Just add them as replies to this thread.
Statistics: Posted by bonesly — Sun Oct 05, 2025 5:30 pm — Replies 7 — Views 425